Out of Control Policy Blog

Kentucky's Bad Hand

In an absurd overreach that stands to waste money and resources, Kentucky Gov. Steve Beshear is attempting to get state court approval to seize some 140 domain names from Internet gambling sites operating legally outside the U.S.

In an effort to get the domains declared illiegal gambling "devices," Beshear isn't even playing the morality card. He boldly asserts that online gaming diverts gambling revenue from the state. Here's Rich Muny, Kentucky state director of the Poker Players Alliance, in an op-ed published yesterday in the Lexington Herald-Leader on why this litigation is wrong on so many levels.

Gov. Steve Beshear recently pushed a case through a state circuit court ordering the seizure of 141 Internet gambling sites' domain names, stating that his intention is to prevent these sites from offering services to Kentuckians.

This radical approach is disturbing for many reasons.

The concept that domain names of Internet sites operating legally in their home nations can be seized by other nations for violation of local laws is one that should concern all Americans.

For example, should CNN's Internet domain name be at risk if CNN posts an article critical of Cuba that Cuba finds unlawful? Should Focus on the Family's domain name be eligible for seizure by Saudi Arabia for articles questioning Muhammad's status as the greatest prophet?

If so, imagine the chilling effect this would have on the Internet. If Beshear succeeds, a very dangerous precedent will be set.

Many inaccurate statements have been made regarding online poker, including ones mischaracterizing the online poker community as being opposed to regulation and taxation.

The Poker Players Alliance, a grass-roots poker advocacy group with more than 1 million members, has been actively promoting legislation implementing regulation and licensing of online poker in the United States. This common sense approach would provide jobs and revenue in the United States while subjecting offshore sites participating in the U.S. market to U.S. regulations and providing strong consumer protections.

Beshear's position? He recently stated his opposition to regulated online poker.
When Beshear said that "unlicensed Internet gambling significantly undermines and threatens horseracing ... by creating unregulated and untaxed competition," he mischaracterized online poker.

Poker is a game of skill in which enthusiasts match wits. It could not be any more different from horse racing, and it's difficult to imagine money flowing from horse racing to the unrelated activity of poker. Additionally, Internet poker is not unregulated. The sites are fully regulated in their home jurisdictions. Also, online poker is not untaxed. Poker income is taxed at the state and federal levels.

The industry itself is not taxed because Kentucky chooses not to levy a tax. The industry is not regulated by the state because Kentucky has chosen not to license and regulate poker sites.

Beshear said that "unlicensed, unregulated, illegal Internet gambling poses a tremendous threat to the citizens of the Commonwealth because of its ease, availability and anonymity," but this is not true of online poker.

There is no state law identifying online poker as an unlawful activity. Rather, state law identifies games of chance, not games of skill, as illegal.

As for claims of anonymous play, poker sites carefully track and verify the identities and ages of all participants by using verification systems equal to those used by youbet.com and twinspires.com, two state-sanctioned, U.S.-based Internet sites for wagering on horse races.

If the "ease, availability and anonymity" of the state-sanctioned sites are acceptable, surely those of online poker should be acceptable as well.

In fact, the casinos Beshear championed in his run for office would have offered far more ease and anonymity than online poker sites offer, with roughly the same availability.
Poker players are not sitting back and taking this without speaking out. They have flooded Beshear's office with hundreds of letters and phone calls, and they will continue this as long as Beshear continues his assault on the Internet and personal freedom.

If Beshear really wants to stop unregulated online poker, he should do it the democratic way. He ought to introduce legislation implementing regulation and licensing of online poker, giving Kentuckians the chance to decide on this issue. It sure beats destroying the Internet via the courts.


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